Police were notified of the fire at 4.52am on Tuesday.
“The building has suffered great damage but it hasn't burned completely down. It's possible the fire brigade will monitor a controlled burn,” police spokesman Ole Kristian Nerby told NTB.
Nerby said it was too early to say anything about the cause of the fire but confirmed that no one was in the building when the fire was discovered.
The building was approved for use as an asylum centre in January. The former boarding house was due to host 64 asylum seekers.
In December, two people were charged with arson for setting fire to a hotel scheduled to house asylum seekers in southwest Norway. That fire was praised on several anti-refugee Facebook pages with warning that “this won't be the last fire”.